As previously discussed, on April 3, 2020, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a process for inquiries to be submitted to OIG about whether administrative enforcement discretion would be provided for certain arrangements directly connected to the 2019 novel coronavirus (COVID-19). OIG established this process to provide regulatory flexibility to ensure necessary care responding to COVID-19, particularly with respect to the federal anti-kickback statute (AKS) and civil monetary penalty (CMP) beneficiary inducement prohibition provisions. OIG responses are publicly available through a frequently asked questions (FAQ) posting on the OIG COVID-19 portal. OIG has continued to update this FAQ since its initial publication, including those inquiries discussed in a May 13 post, most recently providing guidance on the following question:

Physician groups may provide face masks to a nursing home. A physician group that contracts with a nursing home to provide care to that nursing home’s residents questioned whether it could assist the nursing home by providing face masks at no-cost or reduced cost. OIG opined that the physician group providing face masks as personal protective equipment (PPE) to the nursing home posed a low risk of fraud and abuse so long as the following conditions were met:

  1. The decision to provide face masks must be directly connected to addressing the COVID-19 outbreak such as the nursing home suffering a shortage as a result of supply chain disruptions.
  2. The physician group only provides the face masks during the period of the COVID-19 public health emergency.
  3. The physician group does not market the provision of the face masks.
  4. The provision of the face masks is not contingent on the nursing home’s past or anticipated referrals to the physician group.

OIG views the provision of the face masks as a low risk of fraud and abuse because the physician group benefits from lowered risk of infection to its physicians.

OIG further clarified that it views the provision of the face masks as a low risk of fraud and abuse not only because of the importance of PPE in general, but because the physician group benefits from lowered risk of infection to its physicians who interact with the nursing home staff and residents due to the face mask’s use. This position suggests that OIG could negatively view a similar arrangement where the physicians were not contracted to provide services to the nursing home patients. In such a situation, OIG could view the donation of PPE to violate the AKS as a free or discounted good to an actual or potential referral source.

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McGuireWoods will continue to monitor OIG’s release of further FAQs as additional providers utilize this inquiry mechanism. Providers may welcome the flexibility provided by OIG exercising enforcement discretion during the COVID-19 pandemic, recognizing the statements do not bind all investigative bodies who could take a different view. OIG will likely continue to require such arrangements to end at the end of the COVID-19 public health emergency declaration, and therefore, providers should plan for the post-pandemic period depending on the arrangement when utilizing these statements.

McGuireWoods has published additional thought leadership related to how companies across various industries can address crucial COVID-19-related business and legal issues, and the firm’s COVID-19 Response Team stands ready to help clients navigate urgent and evolving legal and business issues arising from the novel coronavirus pandemic.